Tuesday, June 27, 2017

Russia Earned Three Trillion US Dollars from Petroleum Sales Abroad and Exported More than Half of That, OilStat Analysts Say

Paul
Goble

Staunton, June 26 – Russian
companies have earned some three trillion US dollars from the sale of oil and
gas abroad since Vladimir Putin came to power; but instead of using this money
to increase the capitalization of these firms or to transform the economy, Russians
have exported more than half of that to foreign accounts and the purchase of
property abroad.

That is the conclusion of analysts
at the Oilstat portal in an unusually detailed article which suggests that the
Putin years for Russia have been ones of missed opportunities at home although
they have left the wealthiest Russians and the state with an enormous amount of
money abroad that can be used for various purposes (oilstat.ru/analytics/121578).

Between 2002 and the end of 2016,
they say, “Russia received additional income of approximately three trillion US
dollars from the export of fuel and other goods. These means could have changed
the mono-cultural economy of Russia,” they argue. But “this didn’t happen. And
so, where did all these trillions go?”

They didn’t go to the increase in
the capitalization of the companies involved. In fact, these companies had to
come to the Russian state for assistance, something that should not have been
needed had they retained these profits.A portion went to funding the sovereign fund and hard currency reserves
and for financing an increase in foreign investment in Russia.

But, Oilstat says, “the main part of
the money was sent abroad on the private accounts of the constantly growing
group of the wealthiest citizens of Russia who actively worked in foreign
financial markets or in property markets.”

What it did not go into abroad was
into investments that would send earnings back to Russia, as one might have
expected.According to the Russian
Central Bank, this export of money out of Russia amounted to 1.56 trillion US
dollars. Independent analysts suggest that number may in fact understate the
amount.

“Wealthy Russians have put billions
in their own accounts in foreign banks and brokerage accounts or in property.
And although a significant part of the transfers … were carried on a legal
basis, analysts recognize, Oilstat says, that much of it went via uncontrolled
and illegal channels.

That means, although Oilstat’s
analysts don’t say this, that there is an enormous amount of money in the hands
of oligarchs who working with the Kremlin on whom they depend for their
standing can deploy it for political as well as economic goals, thus creating a
dangerous new challenge for the international community.